Fuel Oil & LP Gas Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,175 fuel dealers in the US generate revenue by selling heating fuels, such as LP gas, fuel oil, or kerosene, to a variety of customers, including residential, commercial, and industrial accounts. Other sources of revenue include the lease or rental of LP gas (aka propane) storage tanks and related services. Companies may also sell, install, and service appliances and heating/AC systems. Some large companies operate LP tank or cylinder exchange programs.
Declining Demand
Demand for LP gas and fuel oil for heating is declining, with revenue fluctuations driven primarily by pricing changes and weather conditions.
Seasonality and Weather
Industry sales are seasonal and peak during the “winter heating season," which runs from approximately November through March.
Industry size & Structure
The average fuel oil or LP gas dealer operates out of a single location, employs 17 workers, and generates about $9-10 million annually.
- The fuel oil and LP gas dealer industry comprises 4,175 companies that employ about 71,600 workers and generate about $40 billion annually.
- The industry is somewhat concentrated at the top; the top 50 firms account for 43% of industry sales.
- Large companies include Amerigas Partners, Ferrellgas Partners, Star Group, and Suburban Gas Partners.
- To lower the cost of providing service, most small companies operate locally. Some small companies are family-run and passed down through generations.
Industry Forecast
Fuel Oil & LP Gas Dealers Industry Growth
Recent Developments
Feb 23, 2025 - Lower Sales and Stable Prices
- Employment by fuel oil & LP gas dealers declined by 0.3% in December compared to a year ago amid falling sales for fuel dealers, according to the latest US Bureau of Labor Statistics. Sales for fuel dealers sank 21.9% year over year in November and 3.6% versus the previous month, according to the Census Bureau. The US Energy Information Administration expects heating oil prices for this winter to remain steady, possibly slightly lower, compared to last season due to recent declines in crude oil prices – the main raw material for heating oil production. Inventory levels are healthier than last winter, partly due to increased refinery output, while global crude prices have stabilized from previous highs, which could help moderate costs for consumers in the Northeast (the nation’s largest heating oil market), according to fuel oil provider Hop Energy.
- Sales of heat pumps saw continued growth at the end of 2024, outpacing sales of gas furnaces for home heating, The Wall Street Journal reported in January. While new heat pump shipments have been outpacing gas furnaces since 2022, heat pump sales may have gotten a boost recently due to fears that the fossil-fuel-friendly Trump administration could do away with tax breaks and other financial incentives meant to spur US consumers to electrify their homes. “Over 2024, there’s definitely a substantial increase in the sales of heat pumps relative to furnaces,” Russell Unger, a principal at RMI who works on building decarbonization, told WSJ. Unger says he’s hopeful the heat pump incentives will remain available in the coming years. Currently, homeowners can claim tax credits of up to $2,000 for electric heat pump installations, and additional state-administered rebates worth thousands more are slowly rolling out into the marketplace, according to WSJ.
- Homes that rely on heating oil — highly concentrated in the Northeast — can expect to spend about 5% less this winter than last, with an average cost of $1,140, despite an anticipated 4% increase in demand due to colder temperatures, according to the Energy Information Administration’s Winter Fuels Outlook 2024-2025. The EIA assumes this winter will be colder than last winter across much of the US, especially in the Midwest, and that temperatures will be closer to average following last year’s very mild winter. Households heating with heating oil are expected to consume an average of about 400 gallons this winter with prices averaging $3.50/gallon, down 9% from last winter. Households heating primarily with propane will pay about the same amount as they did last winter on average across the nation. Propane is used for heating in 5% of households, mostly in rural areas.
- As operations at fuel delivery companies become increasingly connected, cybersecurity has become a rising concern for fuel dealers, LP Gas magazine reports. A survey of 127 fuel delivery companies found that hacks and breaches, ransomware, viruses, and security are their biggest concerns. To protect themselves and their customers, companies are investing in tools and strategies to protect data, including password protection, firewalls, two-factor authentication, cybersecurity training, and disk encryption, according to the Cargas 2024 Top Technology Trends in Fuel Delivery Benchmarking Report. To manage their cybersecurity needs, almost half of respondents to the Cargas survey reported relying on a combination of internal and external IT resources, while about a third relied on an in-house IT person/team. A minority said they had no dedicated cybersecurity resources.
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